GHOWDHARY PUNNAMCHAND HASTMAL CO Vs. COMMERCIAL TAX OFFICER

JUDGEMENT

(1.) The Judgment of the Bench was delivered by Obul Reddi, JThe petitioner has filed this writ petition challenging the notice, dated 22nd October, 1969, issued by the Commercial Tax Officer Cuddapab proposing to levy a penalty of Rs. 40,725-18 on the petitioner on the ground that the action sought to be taken by the Commercial Tax Officer is barred by limitation inasmuch as the proceedings for penalty were not initiated within a period of four years or six years as the case may be, from the expiry of the year of assessment.

(2.) The facts are these: The petitioner from submitted its returns for the assessment year 1962;-63, disclosing a turnover of Rs. 13,79,666.19 and it was assessed under section 14 (1) of the Andhra Pradesh General Sales Tax Act (hereinafter referred to as the Act), on 3rd March, 1964. That assessment was set aside on appeal by an order, dated 15th December, 1964 and a fresh best judgment assessment was made on 10th March, 1967. An appeal was preferred against that best judgment assessment and the Assistant Commissione granted some relief. The further appeal preferred to the Tribunal is pending. Meanwhile the Commeicial Tax Officer issued a notice, dated 1st March 1969, proposing to re-open the assessment under sub-section (4) of section 14 of the Act and later passed an assessment order on 8th July, 1969 and an appeal against that order is now pending before the Assistant Commissioner. No notice to show cause why penalty should not be levied on the escaped turnover was given to the petitioner along with the said police dated 1st March, 1969, and for the first time On 22nd October, 1969 the Commercial Tax Officer chose to issue a notice to show cause why penalty should not be levied. It is this notice that is now challenged on the ground that it was issued beyond the period of limitation prescribed under sub-section (4-A) of section It of the Act. No counter has been filed by the respondent disputing the facts stated above. Pending disposal of this petition the penalty as proposed has been levied as evidenced by the order of the Commercial Tax Officer, dated 31st December, 1969 made available for our perusal by the department. The Government Pleader of sales tax cases sought to contend relying upon sub-section (7) of section 14 of the Act that the penalty proceedings initiated by the Commercial Tax Officer are in time and not barred by limitation.

(3.) The question therefore, is whether in computing the period of limitation on the facts of this case the department is entitled to call in aid sub-section (7) of section 14 of the Act. We may therefore, read the relevant provisions of section 14 of the Act. " 14. (4) In any of the following events, namely, where the whole or any part of the turnover or a business of a dealer has escaped assessment to tax, or has been underassessed or assessed at a rate lower than the correct rate, or whether the licence fee or registration fee has escaped levy or has been levied at a rate lower than the correct rate, the assessing authority may, after issuing a notice to the dealer and after making such enquiry as he may consider necessary, by order, setting out the grounds therefor : (a) determine to the best of his judgment the turnover that has escaped assessment and assess the turnover so determined ; (b)............................... (c)............................... (d)............................... (e)............................... (f)............................... In addition to the tax assessed or fee levied under this sub-section the assessing authority may also direct the dealer to pay a penalty as specified in subsection (8). (4-A) An assessment or levy under subsection (4) shall be mack' (a) Within a period of six years from the expiry of the year to which the tax, licence fee or registration fee relates if the event that has occasioned such assessment or levy has occurred on account of the failure of the dealer to disclose the turnover Or any of the particulars correctly and (b) within a period of four years from the expiry of the year aforesaid if such event has ccccurred due to any other causes. (4-B) ............................ (4-C) The powers conferred by subsection (4) on the assessing authority may subject to the same conditions as are applicable in the case of that authority be exercised also by any of the authorities higher than the assessing authority including the Deputy Commissioner concerned. (5) Where an assessment under this section has been deferred on an account of any stay order granted by the High Court in any case, or by reason of the fact that an appeal or other proceeding is pending before the High Court or the Supreme Court involving a question of law having a direct bearing on the assessment in question the period during which the stay order was in force or such appeal or proceeding was pending shall be excluded in computing the period of four years or six years, as the case may be, specified in this section for the purpose of making the assessment. (6) It shall be lawful for the Board of Revenue to direct, by general or special order, any assessing authority to defer assessment in respect of any class of goods or any class of dealer pending clarification by it of any question referred to it if such question has a direcbearing on such assessment. The period between the date of such direction and the date on which such clarification has been received, shall be excluded in computing the period of four years or six years as the case may be specified in this section for the purpose of making the assessment. (7) Where an assessment made under this section has been set aside by the Appellate Tribunal or the High Court Or the Supreme Court for any reason the period between the date of such assessment and the date on which it has been set aside shall be excluded in computing the period of four years or six years, as the case may be, specified in this section for the purpose of making any fresh assessment."